(Yicai Global) April 12 -- Yonghui Superstores, the Tencent Holdings-backed grocery retailer, will become the controlling shareholder in central China regional player Zhongbai Holdings Group.

Yonghui will offer CNY8.10 (USD1.21) per share in an offer worth CNY559 million (USD83.2 million) to raise its stake to 40 percent from 30 percent previously, the Fuzhou-based firm said in a statement. 

Yonghui is optimistic about the prospects for Wuhan-based Zhongbai and the expansion of its shareholding will allow both sides to achieve synergies and boost Zhongbai's value, the firm said. 

The deal will allow Yonghui to supplant a unit of the State-owned Assets Supervision and Administration Commission of Wuhan province as Zhonghai's controlling shareholder.

Shares in Zhongbai [SHE:000759] reached the market's maximum allowed daily rise for two straight trading days, hitting to CNY8.94 from CNY6.59 following the offer. They closed 7.6 percent higher at CNY8.06 at yesterday's close and are 0.25 percent higher at CNY8.08 as of 12.50 p.m. today. 

Yonghui's stock price [SHA:601933] fell 2.96 percent to CNY9.17 per share at yesterday's close and was 1.53 percent higher at CNY9.31 as of 12.50 p.m. today.

Zhongbai is a large-scale operator of chain stores and is the regional industry leader with 1,255 locations. The firm's net profit rose more than six-fold to CNY431 million last year. 

Located in central China, Hubei province is of great geographic significance in terms of connecting southwest China and southeast China, an analyst from Founder Securities said, adding that the area is vital for Yonghui's nationwide positioning, and will help the firm boost its supply chain.

Yonghui was one of the first distribution firms to introduce fresh farm products in modern supermarkets on China's mainland. The firm posted CNY52.7 billion in operating revenue in the first three quarters last year, up 21.7 percent from a year earlier, and CNY1 billion in net profit of the listed firm, down by over one-quarter. 

Tencent invested CNY4.2 billion in the firm to become its fifth-largest shareholder with a 5 percent stake in late 2017, as part of the tech giant's efforts to compete with Alibaba Holding in the new retail field.

Editor: William Clegg